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Fitch this week released its latest analysis of the Landesbank sector, outlining several events that could result from the Banking Federation of the European Union's (BFEU) complaint to the European Commission (EC) that the German public sector banks' support mechanisms are illegal. In the most damaging outcome for Landesbanks, debt already issued by the public sector banks could be downgraded by one to three notches. However, Fitch affirmed its view that the outstanding debt of Landesbanks will be grandfathered, and left the banks' triple-A ratings unchanged with stable outlooks.

Oversubscription in excess of $15bn for KPN's $4.4bn equivalent global financing highlighted the appetite for telecoms paper this week, heralding a warmer than anticipated reception for the upcoming supply due from France Télécom, Telecom Italia and BT before year end. KPN's four tranche issue, including five, 10 and 30 year pieces denominated in dollars, and a five year in euros, was priced through spread talk and massive oversubscription resulted in sharp tightening after break of syndicate, before profit-taking took the spreads back yesterday (Thursday).

Hypo Alpe-Adria Bank has doubled the ceiling off its euro1 billion ($883.70 million) Euro-MTN programme to euro2 billion. The unrated programme has $732.93 million outstanding and is arranged by Deutsche Bank.

Bankers returning from Prague agreed there was one major message coming from potential eastern Europe and Middle East issuers - that most of them were not going to tap the market until next year. Of course, there were some emerging market funding officials talking up their desire to visit the market - Iran is still on course for a $500m Eurobond offering and Romania for a long-dated issue - but bankers are largely sceptical.

Neuer Markt listed e-commerce software provider Intershop raised Eu140m this week in conjunction with a Nasdaq listing. The company is listing in the US in order to generate some acquisition currency in the region, raise its visibility there, and be able to offer US staff options. Intershop's comparables are also mainly listed in the US.

Israeli supplier of printing equipment, Scitex Vision, will reaffirm the growing international importance of the Neuer Markt in Frankfurt when it becomes the first fully owned subsidiary of a Nasdaq listed company to list on the high growth exchange. Although its parent company, Scitex Corporation, is listed on Nasdaq, Scitex Vision receives revenues from across the world, with about a third from the US, about a third from Asia, and about a third from Europe. "Europe is becoming an increasingly important part of the company's business," said a banker close to the deal.

SG has made a series of promotions in its debt capital markets division. The moves follow July's appointment of Olivier Khayat as head of debt capital markets. He came from CDC Marchés. Head of syndication Dominique Robert becomes head of operations and business development in the debt capital markets division. Robert will have responsibility for risk control and new business developments such as e-business, as well as becoming part of the debt capital markets management team.

JP Morgan has pipped Credit Suisse First Boston and Deutsche Bank to the post for the mandate of the Republic of Lithuania's Llt100m ($25m) five year Eurobond issue. The deal, which is scheduled for next month - after elections on October 8 - will be the first locally denominated Eurobond from the Baltic States. It follows Euroclear's approval of the litas registration as a settlement currency, starting on October 1.

Following weak first half year results, Kingfisher plans to demerge its general merchandise operations, including Woolworths and Superdrug, from its DIY and electrical divisions. The general merchandise business reported profits of £6.3m, well below the £28.8m for the same period last year. The news prompted speculation that the general merchandise business may be sold. Analysts have suggested Pinault-Printemps-Redoute (PPR), Metro, and Alliance UniChem as potential buyers. However, PPR has denied it is lining up a bid.

Royal KPN followed the lead set by Telefónica two weeks ago when on Wednesday the Dutch telco priced a blowout $4.38bn dollar and euro global to sell, attracting as much as $23bn of interest worldwide.

The European leveraged buy-out market looks set for a burst of activity as the final quarter of the year gets underway. The quarter promises to bring not only a greater volume of deals to Europe's growing investor base for leveraged assets but also some of the largest transactions seen in Europe. Two big UK LBO deals were announced this week. The first is the £700m acquisition of Rank Group's UK holiday businesses by the privately held caravan parks operator, Bourne Leisure. Barclays Capital has the mandate to arrange the debt financing for the transaction which is understood to comprise some £650m of senior debt as well as a mezzanine tranche. Barclays is expected to approach a select group of banks for sub-underwriting positions over the next week.

While it has been a busy September, the primary market in dollars and euros has not been as hectic as some had feared. Come the end of the month, British Telecom and its $5bn-$10bn multi-tranche offering is on ice - and only two telecoms companies have so far launched jumbo offerings. Nonetheless, Dutch telco Royal KPN went ahead with its $4.38bn equivalent dollar/euro funding exercise this week, and the dollar denominated proceeds are widely thought to have been swapped into euros. It is likely that it went to fixed rate. There were three dollar tranches, at five, 10 and 30 years.